The International Airlines Group (IAG) posted a 22 per cent increase in operating profit to €4.3 billion for 2024, with a slight uptick in business travel volumes.
The parent company of British Airways, Iberia, Aer Lingus, LEVEL and Vueling recorded total full-year revenues of €32 billion, up 9 per cent year-on-year.
Passenger revenue increased 9.5 per cent to €28.3 billion, largely driven by the group’s premium leisure segment and increased capacity for the North Atlantic region – described as “one of the group’s core profit pools”.
Group capacity for the year, measured in available seat kilometres, increased 6.2 per cent year-on-year, while load factor increased 1.2 percentage points to 86.5 per cent. Passenger revenue per available seat kilometres also increased 3.1 per cent.
IAG chief executive Luis Gallego, said: “These results highlight the quality of our businesses and effectiveness of our strategy... We are delivering world-class margins and returns, in line with the targets we set out to the market just over a year ago.”
During an earnings call on Friday (28 February), Gallego noted that demand for business travel had increased slightly throughout 2024, namely from the banking, IT and professional services sectors. Across the group, business travel volumes reached 74 per cent of pre-Covid levels. However, business travel recovery – both in terms of volumes and revenues – differed across its airline brands.
In Q4, for example, Gallego said corporate volumes for British Airways reached 66 per cent of 2019 levels, while revenues recovered to 82 per cent. In the same quarter, Iberia saw corporate volumes recover to 84 per cent, while revenues exceeded 2019 levels by 8 per cent. Corporate volumes for Aer Lingus surpassed pre-pandemic levels by 5 per cent, while revenues recovered to 100 per cent.
However, in its full-year earnings report IAG said it does not expect corporate travel demand to fully recover to pre-Covid levels, “particularly for short duration and short-haul trips”.
All airlines posted positive financial results for the year. British Airways reported an operating profit of £2.05 billion, with a 14 per cent operating margin. Aer Lingus posted profits of €205 million, while Iberia and Vueling reported profits of €867 million and €400 million, respectively.
The group highlighted an increase in demand across its transatlantic services, with a 2.8 per cent year-on-year increase in capacity to the North Atlantic region. Meanwhile, in Europe, group capacity increased 5.8 per cent year-on-year, and passenger load factor was up 0.7 points year-on-year to 86.6 per cent.
In the Asia Pacific region, the group’s financial report said Chinese carriers’ continued capacity growth into the UK and Europe “presented a very challenging environment”. Nevertheless, capacity increased 27.5 per cent year-on-year, with load factor up 0.5 points
to 88.9 per cent.
IAG took delivery of 19 new aircraft in 2024 – 13 for British Airways, four for Aer Lingus and two for Iberia – and expects to receive a further 26 new aircraft in 2025. Investment in modern, fuel-efficient aircraft is a key part the group’s net zero strategy, according to its financial statement, alongside investments in alterative aviation fuel, also known as ‘sustainable’ aviation fuel (SAF).
In 2024, 1.9 per cent of the group’s total fuel consumption was from SAF, “putting us in a strong position to achieve the mandated 2 per cent in the UK and EU for 2025”, the group said.
“We need governments to provide further support for SAF, including measures to encourage private sector investment and to avoid additional regulation that risks making European aviation less competitive than other global competitors,” the group said in its earnings report, adding that “environmental regulations are one of the biggest challenges that we need to manage”.